As winter arrives, health experts are warning that there will be another wave of COVID-19. This has led many to believe that the US economy is not going to revive anytime soon. Economists are also in agreement.
The coming holidays have spurred up economic activities as people are starting to shop for gifts and such. Even so, is this enough to sustain the US economy?
Leading economists are busy analyzing data to see what 2021 will bring to the table. As per reports, a surge in coronavirus cases is going to hamper any possible growth or recovery.
Gary Schlossberg, a strategist from Wells Fargo Investment Institute said that they are looking for any sign that would indicate that the economy is going to recover. Unfortunately, there haven’t been adequate signs as of yet. One such sign is the rapid increase in weekly unemployment claims. Last week, the number jumped to 778,000. It’s the 2nd consecutive weekly high.
Unemployment Claims Hit A New High
The rise in unemployment claims means that people who lost their jobs temporarily in the wake of COVID-19 are losing their jobs permanently now. One reason is that many companies have failed to survive through this crisis and are closing their doors. Schools and workspaces have let go of their employees across the nation.
Moreover, talks of another lockdown are sending chills down the US economy. Right after Christmas, the Pandemic Emergency Unemployment Compensation will expire. The program helped unemployed people with benefits. If the federal government does not take any drastic measures soon, many will face the brunt of it.
An advisor from Aptus Capital, David Wagner, said that the data has begun to fall, which is dangerous for the US economy. Additionally, the fourth quarter does not seem promising as of yet.
As per the released estimate in November, the 3rd quarter US economy GDP increased by 33.1%. This is because the export and investment sector saw some growth. However, the personal spending, consumption by local and state government, and the private inventory investment have offset the slight upward trajectory.
The 3rd quarter estimate saw an increase because of manufacturing gains and a rise in durable products. Right after the slight rise, the US economy saw a decrease of 31.4%.
2021 US Economy Predictions
As for October, household consumption saw a rapid decline. Experts say that if the federal government passes the second round of stimulus checks, there’s a chance at recovery.
Since the general income has dropped drastically since the onset of COVID-19, the future seems grimmer. Economists are hoping that worsening conditions might motivate the government to come to an agreement on a stimulus bill faster.
Additionally, the consumer sentiment is turning bitter by the day.